Battery storage will remain hamstrung unless National Grid, Ofgem and government make the changes outlined in its new report, says Scottish Renewables
The lobby group called for National Grid to be allowed by Ofgem to give longer contracts to providers of flexibility services and to set out how and when Triads – the transmissions system peak charging methodology – will change. Adding just one year to enhanced frequency response (EFR) contracts (currently four years) would make a positive impact, argues the report.
The system operator should also better align its tenders for various flexibility services to enable storage developers to ‘stack’ several revenue streams together, thereby making battery storage a more attractive prospect to investors.
The report also calls for policymakers to explore a ‘cap and floor’ regime for developers of larger battery storage projects. This regulatory model essentially limits their exposure to up- and downsides of investment – but also sets a ceiling on revenues.
Meanwhile, Scottish Renewables urged Decc and Ofgem to stick to the timelines set out by the National Infrastructure Commission (NIC) in clarifying the legal and regulatory status of storage within the electricity market. Storage is currently classified both as generation and as storage, meaning it is subject to double charging. The NIC wants that cleared up by next spring.
Because battery storage can play a significant role in balancing distribution networks, the report also urges Ofgem to look at the way DNOs are incentivised for using batteries and storage more innovatively. Ofgem has set up funding schemes for DNOs in this regard but the knowledge is not always shared as well as it should be with the wider market. If DNOs can create new revenue streams for battery storage operators to work into their ’stacks’, investment will follow, reasons Scottish Renewables.
The report also sets out 14 potential revenue streams for battery storage operators and how these might interact, spanning transmission system balancing services through voltage optimisation and black start to arbitrage.
Download it here.
Battery storage is one of four sessions that will be explored at The Energyst’s Demand-Side Response conference on 8 September in London. Free to end users, you can request a ticket here.
Ahead of the event, we are also surveying readers for their views on DSR and storage and how the market could be scaled. Please take five minutes to complete this short survey which will form the research component of a new report.
Free demand-side response conference
Demand-side response: Give us your views
Ofgem: Energy flexibility will become more valuable than energy efficiency
National Grid boss: future of energy is demand not supply
Government backs Adonis’ smartgrid plan, pledges £50m+ for storage and demand response
National Grid says impact of solar requires greater system flexibility
National Grid signs 20MW demand-side response contract with battery storage operator
Eon opens 2MW battery storage facility
Decc says energy storage ‘a top priority’
National Grid says UK will miss 2020 targets, predicts big battery future
Major changes to capacity market proposed
Hot technology: energy storage via heat battery
Western Power Distribution ramps up demand-response trials, calls for participants
Smart grids ‘require local control and businesses must play or pay’
National Grid must simplify demand response to scale UK market
40% of firms say they could shift energy use as National Grid asks them to turn up
Government to consult on demand response in spring
Energy Technologies Institute: Let private firms run smartgrid trials
MPs told UK needs energy system architect and must commercialise smartgrid
Flexitricity blasts transitional capacity market as Npower plots supermarket sweep
National Infrastructure Commission to focus on energy storage and demand response
Tempus: A five year old can see capacity market is anticompetitive
National Grid plots superfast grid balancing service
Keep calm and scale demand response, says Scots energy inquiry
National Grid flags demand response changes, urges suppliers and TPIs to deliver
Click here to see if you qualify for a free subscription to the print edition of The Energyst, or to renew.
Follow us at @EnergystMedia. For regular bulletins, sign up for the free newsletter.